Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 28

A major repair on the suspension system of a 5-year-old car cost $2000 because the warranty expired after 3 years of ownership. The cost of periodic maintenance has been $800 every 2 years. If the owner donates the car to charity after 8 years of ownership, what is the equivalent annual cost of the repair and maintenance in the 8-year period of ownership Use an interest rate of 8% per year, and assume that the owner paid the $800 maintenance cost immediately before donating the car in year 8.